Petroleum Institutions

8. Regulatory agencies

The petroleum sector ministry should be empowered and expected to delegate regulatory functions to a subordinate and quasi-independent agency. It would normally report to the petroleum sector ministry and have oversight functions for:

Responsibility for HSE oversight and enforcement is commonly assigned to a regulatory agency. On HSE issues, the regulatory agency typically will have reporting obligations to the petroleum sector ministry and one or more other ministries or agencies involved in HSE issues. This, however, is not always the case. In Norway, for example, safety matters are vested in a distinct petroleum safety authority within the regulatory agency. This Norwegian approach appears to highlight the importance given to safety considerations; it also provides some autonomy from within the regulatory agency itself.

Mandates of regulatory agencies

The collection, storage, and analysis of petroleum sector data and samples, and the preparation and maintenance of records on petroleum and mining rights and agreements have become critical mandates for regulatory agencies. Good practice would provide for an arms-length relationship between the regulatory agency and its ministry in order to safeguard the regulatory agency’s objectivity. In a number of states, petroleum sector regulatory functions, either formally or in practice, have been allocated to the NRC rather than to an independent agency. This choice appears to have been based primarily on the perceived superiority of expertise within the NRC: a practice which seriously compromises the impartiality of regulation.